The U.S. is steadily inching toward installing some offshore wind power, with nearly a dozen projects in the works, according to a new report prepared for the Department of Energy. But although the report labels all of those projects as being in the “advanced stages” of development, their prospects are far from certain. And global industry trends -- including a shift toward bigger projects sited farther offshore that perform better but are more costly to build -- only emphasize the hurdles the sector faces.
The update on the offshore wind market by the consultancy Navigant (PDF), intended to help guide policy decisions pertaining to the nascent U.S. industry, points out that “the United States is still awaiting the installation of its first commercial-scale offshore wind project.” But that doesn’t mean some progress hasn’t been made since last year’s report.
According to the report:
In addition to two BOEM commercial lease auctions for federal Wind Energy Areas (WEAs), other later-stage, commercial-scale projects have made incremental progress toward starting construction. On the demonstration project front, the DOE awarded seven Advanced Technology Demonstration (ATD) project grants in December 2012 that will help address ongoing challenges and cost barriers to offshore wind energy. In addition, in June 2013, the University of Maine (in partnership with the DOE) installed the United States’ first offshore wind turbine, a 1/8-scale pilot turbine on a floating foundation.
Navigant lists eleven projects that it characterizes as being in the “advanced stages” of development -- meaning that they have either received approval for an interim limited lease or a commercial lease in state or federal waters; conducted baseline or geophysical studies at the proposed site; or signed a power purchase agreement with a power offtaker. But as the report states, “Given global historical trends…it is unlikely that all eleven of these projects will” be built as planned, “due to delays, cancellations, or other regulatory or market issues.”
Two of the projects are in state waters off Texas, one is in Lake Erie near Cleveland, and the other eight are clustered in state and federal waters in an Atlantic Coast zone stretching from Virginia to Massachusetts. The projects add up to 3,842 megawatts of planned capacity. For context, as of the end of 2012, worldwide offshore installed capacity was 5,248 megawatts, 93 percent of which was in European waters; nearly all the rest was in China (365 megawatts), with Japan (5 megawatts) and South Korea (2 megawatts) dipping their toes in the water too.
Three of the projects have targeted completion dates of 2015: Deepwater’s 30-megawatt Block Island demo project; the 27-megawatt Lake Erie project and Fishermen’s Energy’s 25-megawatt wind farm off New Jersey, according to the Navigant report. Looming much larger on the horizon is Cape Wind, which is planned for 468 megawatts and expects to begin construction before the end of 2015. All the projects have specific hurdles to overcome, however.
Navigant identified three major challenges for the U.S. offshore wind development:
- The cost-competitiveness of offshore wind energy
- A lack of infrastructure such as offshore transmission and purpose-built ports and vessels
- Uncertain and lengthy regulatory processes